{"id":"nsw:sl-2011-0284","name":"Insurance Premiums Order (Retro-Paid Loss Premium Method) 2011–2012","slug":"insurance-premiums-order-retro-paid-loss-premium-method-2011-2012","collection":"regulation","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"284 of 2011","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":178164,"registerId":"nsw-nsw:sl-2011-0284-current","compilationNumber":null,"startDate":"2026-04-05","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Name of Order","content":"#### 1 Name of Order\n\n1 Name of Order\n\n> This Order is the [Insurance Premiums Order (Retro-Paid Loss Premium Method) 2011–2012](/view/html/inforce/current/sl-2011-0284).","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n2 Commencement\n\n> This Order commences at 4 pm on 30 June 2011 and is required to be published in the Gazette.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Interpretation","content":"#### 3 Interpretation\n\n3 Interpretation\n\n> > (1) In this Order, words and expressions have the same meanings as they have in the General Order, unless this Order provides otherwise.\n> \n> > (2) In this Order:\n> > \n> > adjustment date, in relation to a policy of insurance, means each of the following dates:\n> > \n> > > (a) the date that is 15 months after the date of the commencement of the period of insurance (the first adjustment date),\n> > \n> > > (b) the date that is 24 months after the date of the commencement of the period of insurance (the second adjustment date),\n> > \n> > > (c) the date that is 36 months after the date of the commencement of the period of insurance (the third adjustment date),\n> > \n> > > (d) the date that is 48 months after the date of the commencement of the period of insurance (the fourth adjustment date),\n> > \n> > > (e) the date that is 60 months after the date of the commencement of the period of insurance (the fifth adjustment date).\n> > \n> > cost of claims has the same meaning as in Division 4 of Part 18 of the [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037).\n> > \n> > General Order means:\n> > \n> > > (a) the [Insurance Premiums Order 2011–2012](/view/html/inforce/current/sl-2011-0283), or\n> > \n> > > (b) if no such order has been made, the [Insurance Premiums Order 2010–2011](/view/html/inforce/current/sl-2010-0265).","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Application of Order","content":"#### 4 Application of Order\n\n4 Application of Order\n\n> > (1) This Order applies only to and in respect of policies of insurance for employers to whom the optional alternative method of calculating premiums under section 168A of the Act applies (retro-paid loss premium policies).\n> \n> > (2) This Order applies to and in respect of retro-paid loss premium policies that are to be or have been issued or renewed so as to take effect on or after 4 pm on 30 June 2011 and before 4 pm on 30 June 2012.\n> \n> > (3) If, before 4 pm on 30 June 2012, an insurance premiums order that applies only to and in respect of retro-paid loss premium policies has not been made in respect of such policies of insurance taking effect on or after that time, this Order applies to and in respect of those policies pending the making of such an order.\n> \n> > (4) The General Order (other than clauses 3 and 4) applies to and in respect of retro-paid loss premium policies, unless this Order provides otherwise.\n> \n> > (5) This Order does not apply to a policy of insurance issued or renewed by a specialised insurer that is exempted from insurance premiums orders by clause 165 of the [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037).","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Classification of large employers","content":"#### 5 Classification of large employers\n\n5 Classification of large employers\n\n> A large employer within the meaning of the General Order is classified a large employer under this Order.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Retro-Paid Loss Premium Method of premium calculation","content":"#### 6 Retro-Paid Loss Premium Method of premium calculation\n\n6 Retro-Paid Loss Premium Method of premium calculation\n\n> For the purposes of section 168A of the Act, the alternative method is to calculate the premium for a policy of insurance at the commencement of the period of insurance (the deposit premium), and then recalculate the premium at each adjustment date (the adjusted premium), in accordance with this Order.","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Minimum premium","content":"#### 7 Minimum premium\n\n7 Minimum premium\n\n> Despite any other provision of this Order, a deposit premium and an adjusted premium in respect of any policy of insurance is to be no less than $175.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Calculation of required deposit: section 172A of Act","content":"#### 8 Calculation of required deposit: section 172A of Act\n\n8 Calculation of required deposit: section 172A of Act\n\n> > (1) The required deposit for an employer in relation to a policy of insurance is to be calculated in accordance with the following formula:\n> > \n> > > (a) before the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0284)%20AND%20(Year%3D2011)%20AND%20(%22Historical%20Document%22%3D0))/g1.gif)\n> > \n> > > (b) on and from the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0284)%20AND%20(Year%3D2011)%20AND%20(%22Historical%20Document%22%3D0))/g2.gif)  \n> > > where:\n> > > \n> > > RD is the required deposit in respect of the period of insurance to which the policy relates.\n> > > \n> > > Pmax is the maximum premium that is payable by the employer calculated in accordance with Schedule 1.\n> > > \n> > > PD is the deposit premium payable by the employer calculated in accordance with Schedule 1.\n> > > \n> > > P is the premium payable by an employer for a policy of insurance calculated in accordance with Schedule 1.\n> \n> > (2) However, if the employer is a member of a group, subclause (1) does not apply and the required deposit for an employer in relation to a policy of insurance is to be calculated in accordance with the following formula:\n> > \n> > > (a) before the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0284)%20AND%20(Year%3D2011)%20AND%20(%22Historical%20Document%22%3D0))/g3.gif)\n> > \n> > > (b) on and from the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0284)%20AND%20(Year%3D2011)%20AND%20(%22Historical%20Document%22%3D0))/g4.gif)  \n> > > where:\n> > > \n> > > RD is the required deposit in respect of the period of insurance to which the policy relates.\n> > > \n> > > PGmax is the maximum premium that is payable by the members of the group in respect of the period of insurance to which the group’s policies relate calculated in accordance with Schedule 2.\n> > > \n> > > PGd is the deposit premium payable by the members of the group in respect of the period of insurance to which the group’s policies relate calculated in accordance with Schedule 2.\n> > > \n> > > PEd is the deposit premium that is payable by the employer who is a member of a group calculated in accordance with Schedule 2.\n> > > \n> > > PG is the group premium payable by the members of the group in respect of the period of insurance to which the group’s policies relate calculated in accordance with Schedule 2.\n> > > \n> > > PE is the premium for the time being payable by an employer who is a member of a group in respect of the period of insurance to which the policy relates (including, where adjustments are required to be made to that premium by reason of the operation of this Order, the premium so payable by reason of those adjustments).","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"Schedules form part of Order","content":"#### 9 Schedules form part of Order\n\n9 Schedules form part of Order\n\n> Schedules 1–4 form part of this Order.","sortOrder":8},{"sectionNumber":"Schedule 1","sectionType":"schedule","heading":"Method of calculation of deposit premium and adjusted premium—general","content":"# Schedule 1 Method of calculation of deposit premium and adjusted premium—general\n\nSchedule 1 Method of calculation of deposit premium and adjusted premium—general\n\n(Clause 8)","sortOrder":9},{"sectionNumber":"Schedule 2","sectionType":"schedule","heading":"Method of calculation of deposit premium and adjusted premium—member of a group","content":"# Schedule 2 Method of calculation of deposit premium and adjusted premium—member of a group\n\nSchedule 2 Method of calculation of deposit premium and adjusted premium—member of a group\n\n(Clause 8)","sortOrder":12},{"sectionNumber":"Schedule 3","sectionType":"schedule","heading":"Experience adjustment factor","content":"# Schedule 3 Experience adjustment factor\n\nSchedule 3 Experience adjustment factor\n\n(Schedule 1, clause 2 and Schedule 2, clause 6)","sortOrder":19},{"sectionNumber":"Schedule 4","sectionType":"schedule","heading":"Claims adjustment factor","content":"# Schedule 4 Claims adjustment factor\n\nSchedule 4 Claims adjustment factor\n\n(Schedule 1, clause 2 and Schedule 2, clause 6)\n\nGeneral\n\nThe claims adjustment factor for an employer (“V”) (or for a group (“VG”)) at the adjustment date set out in Column 1 of the Table to this clause is, if the employer has (or all the members of the group of employers of which the employer is a member have) elected a large claim limit for the purposes of clause 154 (5) of [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037) of:\n\n> (a) $350,000—the factor set out in Column 2 of the Table corresponding to that date, and\n\n> (b) $500,000—the factor set out in Column 3 of the Table corresponding to that date.\n\nTable\n\n| Column 1 | Column 2 | Column 3 |\n| Adjustment date | Adjustment factor “V” (or “VG”) for $350,000 large claim limit | Adjustment factor “V” (or “VG”) for $500,000 large claim limit |\n| First adjustment date (being commencement of policy period plus 15 months) | 3.05 | 2.95 |\n| Second adjustment date (being commencement of policy period plus 24 months) | 2.10 | 2.00 |\n| Third adjustment date (being commencement of policy period plus 36 months) | 1.80 | 1.70 |\n| Fourth adjustment date (being commencement of policy period plus 48 months) | 1.75 | 1.67 |\n| Fifth adjustment date (being commencement of policy period plus 60 months) | 1.75 | 1.67 |","sortOrder":23}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"Based on available information, the order appears to have remained within its original intended scope — a time-limited, technically specific instrument governing a niche premium calculation method for the 2011–2012 policy year. It has not been amended since commencement, which is consistent with a single-year regulatory instrument that expires naturally at the end of the relevant insurance period."},"complexity_factors":["Highly technical actuarial and insurance premium calculation methodology not explained within the available text","Specialist workers compensation regulatory framework requiring knowledge of the broader NSW workers compensation scheme","Retrospective premium adjustment mechanisms involve complex financial calculations with caps, minimums, and adjustment factors","Limited legislative text is available for analysis — the document as provided is largely metadata and navigation content rather than substantive provisions","Sits within a layered regulatory structure involving the Workers Compensation Act, WorkCover authority rules, and insurer obligations","Targeted at sophisticated commercial parties (large employers) but has indirect effects on workers"],"plain_english_summary":"This NSW administrative order prescribes the Retro‑Paid Loss Premium Method for the 2011–2012 workers compensation year: a retrospective premium system that adjusts an employer’s premium after the policy year based on actual paid claims.  \n\nIt primarily affects large employers who opt into retro arrangements, WorkCover NSW and authorised insurers, and matters because it sets the rules, rates and caps that create financial incentives to manage claims and workplace safety."},"kimi_summary":{"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":false,"description":"This Order appears tightly scoped to its original purpose. It implements the retro-paid loss premium method as authorised by section 168A of the Workers Compensation Act for the 2011-2012 policy year. The inclusion of group provisions (Options 1-3) and the five-year adjustment structure appears to be part of the original legislative design for this alternative premium system rather than scope creep. The Order does not expand beyond premium calculation methodology for this specific optional insurance product."},"complexity_factors":["18+ defined variables across Schedules (P, C, V, PD, Pmax, Pmin, V5, T, S, Q, D, M, A, RD, PGmax, PGd, PEd, PG, PGmin, TE, TG, SG, PE, CG, VG, CE)","Multiple nested calculation formulas with cross-references between Schedules (e.g., Schedule 1 references Schedule 3 for 'S' and Schedule 4 for 'V')","Conditional logic with date-based variations (different formulas apply before vs. on/after first adjustment date)","Three separate calculation options for group members (Options 1, 2, 3) with Option 2 containing a conditional fallback to Option 1 if CG=0","Dual-track system: separate calculation methods for individual employers vs. group members with different deposit requirements","Extensive cross-referencing to external documents (General Order, Workers Compensation Regulation 2010, Workers Compensation Act)","Mathematical formulas rendered as images (g1.gif through g20.gif) making the actual computational logic inaccessible in text form","Temporal complexity with five distinct adjustment dates triggering recalculations with different adjustment factors","Minimum and maximum premium caps that themselves require multi-step calculations","Exception clauses (e.g., clause 7 minimum premium override, clause 5 exemption for specialised insurers)"],"plain_english_summary":"**What this legislation does**\n\nThis Order sets out a special method for calculating workers compensation insurance premiums for large employers in New South Wales who choose an alternative payment system called the \"retro-paid loss premium method.\" Instead of paying a fixed premium upfront based on estimated risk, these employers pay a deposit premium initially, then have their premium adjusted over five years based on their actual claims costs.\n\n**Who it affects**\n\n- **Large employers** in NSW who opt into this alternative premium calculation method under section 168A of the Workers Compensation Act\n- **Groups of employers** (related companies or entities that can be treated as a group for insurance purposes)\n- **Insurance companies** issuing these specialised policies\n\n**How it works**\n\nThe system operates through a series of adjustments over 60 months:\n\n- **Deposit premium**: Paid at the start of the policy period (minimum $175)\n- **Five adjustment dates**: Premiums are recalculated at 15, 24, 36, 48, and 60 months after the policy starts\n- **Claims-based adjustments**: Premiums go up or down based on the actual cost of workers compensation claims (excluding journey and recess claims)\n- **Floors and ceilings**: Premiums cannot fall below a minimum or exceed a maximum calculated amount\n\n**Key features**\n\n- **Experience rating**: Employers with better safety records (fewer claims) pay less over time; those with more claims pay more\n- **Group options**: Members of corporate groups can choose between three different calculation methods (Options 1, 2, and 3) depending on how they want claims costs shared across the group\n- **Claims adjustment factors**: Multipliers that decrease over time (from 3.05 or 2.95 down to 1.75 or 1.67) depending on whether the employer chose a $350,000 or $500,000 large claim limit\n- **Required deposits**: Employers must provide security deposits calculated as a percentage of the difference between maximum and actual premiums\n\n**Why it matters**\n\nThis creates a **pay-as-you-go** system that rewards workplace safety. Employers who prevent injuries benefit from lower premiums over the five-year adjustment period, while those with poor safety records face higher costs. It gives large employers more control over their insurance costs but also more financial exposure if claims exceed expectations. The complex formula structure attempts to balance incentive for safety with predictability for insurers."},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"This Order does not broaden policy coverage; it narrows and specifies the computational mechanics for the optional retro‑paid loss premium method for policies taking effect 4 pm 30 June 2011–4 pm 30 June 2012 (clause 4(1)–(3)). Who pays: employers (individual or as group members) bear adjusted premiums (Schedules 1–2). Who decides: insurers calculate premiums per the prescribed formulas and apply employers’ large‑claim election which alters the claims factor (clause 6; Schedule 4). It defers to the General Order for other tariff and contribution inputs (clause 4(4))."},"complexity_factors":["Multi‑stage numerical formulas across Schedules 1–2 that compute deposit and adjusted premiums and incorporate caps (Pmin/Pmax) and a hard minimum ($175) (clauses 6–8; Schedule 1).","Multiple adjustment dates (15, 24, 36, 48, 60 months) with different treatments at each date (clause 3(2); Schedule 4 table).","Distinct calculation paths for solo employers and group members, with three group options and group‑level aggregates (Schedule 2, clauses 2–5; Schedule 2(6) interpretation).","Experience adjustment factor (Schedule 3) and claims adjustment factor (Schedule 4) interact with claim costs and tariff components, creating interdependent inputs.","Claims adjustment factors vary by employer election of large‑claim limit ($350k or $500k), changing multipliers by adjustment date (Schedule 4).","Extensive cross‑references to the General Order and Workers Compensation Regulation for defined terms, tariff, and contribution items, requiring combined reading (clause 3; clause 4(4); Schedule 1 interpretations).","Practical compliance burden: insurers must compute, reconcile and apply adjustments repeatedly over years; employers and groups must track cost of claims and group allocations (clauses 6–8; Schedules 1–3)."],"plain_english_summary":"This Order prescribes the exact method for calculating \"retro‑paid loss\" workers’ compensation insurance premiums for employers using the optional method under s.168A: insurers collect a deposit premium at policy start and then recalculate the premium at up to five adjustment dates over five years using formulae in Schedules 1–4. It affects employers (including group members) and insurers by changing premium timing, payment exposure and administrative reconciliation; it also sets a $175 minimum and different rules where employers are in groups or elect a large‑claim limit."}},"importantCases":[],"_links":{"self":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2011-2012","history":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2011-2012/history","analysis":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2011-2012/analysis","conflicts":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2011-2012/conflicts","importantCases":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2011-2012/important-cases","documents":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2011-2012/documents"}}